Protesters in Cyprus gather outside parliament as government officials try to strike a bailout deal with the European Union. NBCNews.com's Dara Brown reports.
A solution to Cyprus' bailout crisis within the framework set down by the European Union may be possible within "the next few hours," the deputy leader of the island's ruling Democratic Rally party said on Friday.
"There is cautious optimism that in the next few hours we may be able to reach an agreed platform so parliament can approve these specific measures which will be consistent with the approach, the framework and the targets agreed at the last Eurogroup," Averof Neophytou told reporters.
The lines at bank cash machines in Cyprus are growing longer and in some cases angrier. The European Central Bank has given the island's government until Monday to find its six billion euro share of the bailout or - it says - it'll pull the plug on the rest of the cash and banks will face collapse. The banks themselves remain closed. Faisal Islam of Channel Four Europe reports.
The news came hours after the Cypriot finance minister left Moscow empty-handed when Russia turned down appeals for aid, leaving the island to strike a bailout deal with the EU before Tuesday or face the collapse of its financial system.
The rebuff left Cyprus looking increasingly isolated, with the deadline looming to find billions of euros demanded by the EU in return for a 10 billion euro ($12.93 billion) bailout.
Without it, the European Central Bank said on Wednesday it would cut off emergency funds to the country's teetering banks, potentially pushing Cyprus out of Europe's single currency.
"The talks have ended as far as the Russian side is concerned," Russian Finance Minister Anton Siluanov told reporters after two days of crisis talks with his Cypriot counterpart, Michael Sarris.
Having angrily rejected a proposed levy on tax deposits in exchange for the EU bailout, Nicosia had turned to the Kremlin to renegotiate a loan deal, win more financing and lure Russian investors to cut-price Cypriot banks and gas reserves.
Wealthy Russians have billions of euros at stake in Cyprus's outsized and now crippled banking sector.
Banks are closed on Cyprus but the ATM's are still dispensing cash as the government tries to avert a financial crisis. NBCNews.com's Dara Brown reports.
But Siluanov said Russian investors were not interested in Cypriot gas and that the talks had ended without result.
Sarris was due to fly home, where lawmakers were preparing to debate measures proposed by the government to raise at least some of the 5.8 billion euros ($7.48 billion) required to clinch the EU bailout.
They included a "solidarity fund" bundling state assets, including future gas revenues and nationalized pension funds, as the basis for an emergency bond issue and likened by JP Morgan to "a national fire sale".
They were also considering a bank restructuring bill that officials said would see the country's second largest lender, Cyprus Popular Bank, split into good and bad assets, and a government call for the power to impose capital controls to stem a flood of funds leaving the island when banks reopen on Tuesday after a week-long shutdown.
'Playing with fire'
There was no silver bullet, however, and Cyprus's partners in the 17-nation currency bloc were growing increasingly unimpressed.
To help pay for the $13 billion European bailout, the government plans to take up to 10 percent from all savings accounts, angering those who say they aren't responsible for the economic crisis. CNBC's Sue Herera reports.
"I still believe we will get a settlement, but Cyprus is playing with fire," Volker Kauder, a leading conservative ally of German Chancellor Angela Merkel, told public television ARD.
There were long lines at ATMs on Thursday and angry scenes outside parliament, where hundreds of demonstrators gathered after rumors spread that Popular Bank would be closed down and its staff laid off.
"We have children studying abroad, and next month we need to send them money," protester Stalou Christodoulido said through tears. "We'll lose what money we had and saved for so many years if the bank goes down."
Cypriots have been stunned by the pace of the unfolding drama, having elected conservative President Nicos Anastasiades barely a month ago on a mandate to secure a bailout. News that the deal would involve a levy on bank deposits, even for smaller savers, outraged Cypriots, who raided cash machines last weekend.
This story was originally published on Fri Mar 22, 2013 6:02 AM EDT